In a new turn of events, Kenya is set to import fuel from the United Arab Emirates (UAE) on credit amid another loom fuel shortage.
The government approached the move in a bid to neutralize the dominance of oil majors who have been blamed for the shortages.
As such, the government could allow the National Oil Corporation of Kenya (NOCK) to import 30% which represents a third of Kenya’s petroleum.
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NOCK will sell most of the fuel to independent dealers which control 40% of the country’s oil market.
A report by business daily informed that UAE will finance or provide the product on credit. This means NOCK will trade and payback later.
At the same time, the country is staring at a looming fuel crisis due to supply challenges caused by insufficient stocks in the market.
Energy and Petroleum CS Monica Juma had raised similar concerns blaming a section of oil marketing companies for hoarding fuel stocks.
The companies were also said to be diverting fuel to export markets further worsening the crisis.
The importers are expected to adhere to the ratio of 60:40 for local and transit but this has not been the case.
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In a letter dated Tuesday, April 26, Petroleum PS Andrew Kamau warned oil marketers from exporting petroleum products declared as local in excess of the transit volume of 40%.
“During the VSM held today, we noted that a total of 34,000m3 as of 11 am this morning are held in excess of the transit volumes in the KPC system
“For buyers, all their excess volume declared at transit will be reallocated in the next ullage allocation, and their subsistent cargo firmed up will be reallocated accordingly,” Kamau said.